We have held a long position in Brookfield Infrastructure Partners (BIP) since the beginning of 2011 and we have been pleased with the results of the company during this time. We published our research analysis report reaffirming our thesis behind our investment in BIP two months ago. We then followed up with a report analyzing the company’s secondary offering in order to partially finance several strategic initiatives for BIP, including approximately $165 million to acquire an interest in Autopista Vespucio Norte, $250 million to acquire an interest in OHL Brasil and $465 million to acquire 85% of Inexus Group and invest equity in its recapitalization. While we typically frown on companies issuing secondary offerings in order to finance “growth,” BIP is not your typical company and the assets it owns are not your typical every-day investable assets. BIP grows through prudently acquiring high-quality infrastructure assets much as a private equity firm grows through the acquisition of desirable investment targets. We think of our investment in the partnership units of Brookfield Infrastructure as a diversification away from traditional stocks and bonds and being able to utilize a high-quality asset manager for investing in unique, hard-to-duplicate infrastructure assets.

In conjunction with the secondary public offering of partnership units, Brookfield released preliminary financial information. While we are never happy to see a company’s EPS or in BIP’s case Fund Flows from Operations decline on a year-over-year basis, we were happy that it exceeded the consensus estimates of Wall Street. For the ninth time in the last ten quarters, BIP’s Fund Flows from Operations exceeded consensus estimates published by sell-side analysts.